Please find attached a presentation GLNG Investor Tour, being presented by Mark Macfarlane in Roma on Thursday 3 November 2011.

Transcription

1 Santos Ltd ABN Ground Floor, Santos Centre 60 Flinders Street Adelaide South Australia 5000 GPO Box 2455 Adelaide South Australia 5001 Direct: Facsimile: TO: FROM: Company Announcements Office ASX Limited Company Secretary DATE: 3 November 2011 SUBJECT: GLNG Investor Tour Presentation Please find attached a presentation GLNG Investor Tour, being presented by Mark Macfarlane in Roma on Thursday 3 November David Lim Company Secretary

2 GLNG Investor Tour 3-4 November

3 Disclaimer & Important Notice This presentation contains forward looking statements that are subject to risk factors associated with the oil and gas industry. It is believed that the expectations reflected in these statements are reasonable, but they may be affected by a range of variables which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, geotechnical factors, drilling and production results, gas commercialisation, development progress, operating results, engineering estimates, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial markets conditions in various countries, approvals and cost estimates. All references to dollars, cents or $ in this document are to Australian currency, unless otherwise stated. 2

4 Project Overview First LNG expected in 2015 on schedule Development of CSG resources in the Bowen and Surat Basins FID Jan 2011 US$16 billion project 5,000 jobs in construction and 1,000 jobs in production 420km pipeline and 7.8mtpa two train plant First cargo 2015 Customers - PETRONAS, 3.5mtpa - Kogas, 3.5mtpa Fairview Area Roma Area Arcadia Area Queensland Scotia Area 3

5 Strong Partnership / Contractors Project partners have industry leading expertise providing end to end supply chain coverage Predominantly fixed price EPC contracting strategy with world-class contractors GLNG leveraging strength of partnerships 4

6 Experienced Leadership Team President GLNG Mark Macfarlane Experience: 25 years Oil & Gas experience. Held position of Vice President Eastern Australia for Santos Director Gas Supply Mike Hughes GLNG Program Director Christian Placines Project Director Plant & Port Jim Gardiner GM Downstream Operations Yahya Ibrahim GM Upstream Operations Rob Simpson GM Business Services Olivier Depraz GM External Affairs Victoria Somlyay GM Human Resources Peter White GM Marketing Kartina Amin (Acting) GM Legal Patrick Ronan 25+ years (including 20+ years oil & gas) extensive operational and finance management, business development, international management and strategic planning experience Total secondee. 40 years project management experience 35+ years oil and gas, 15 years LNG project experience PETRONAS secondee. Previously Managed MLNG. 28 years operations experience 30+ years operations and project experience Total secondee. 29 years oil & gas experience over a range of projects with Total 15+ years political & senior corporate affairs experience 15+ years HR experience, significant oil & gas experience, project experience within construction industry PETRONAS secondee. 13 years in oil & gas industry with 8 years in LNG marketing & trading covering Atlantic & Asia Pacific regions 20 yrs legal experience in construction, infrastructure, resources and finance projects globally Gas Supply Execute Operate Support structured for delivery 5

7 Project Progress First LNG expected in 2015 on schedule Component Highlights g Upstream Pipeline Plant and Port ~520 landholder agreements in place All cultural heritage clearances obtained >500 Fluor personnel working on project 383 total wells drilled in the GLNG fields to date Industry leading position on water and brine management - Two reverse osmosis (RO) plants, two associated water amendment facilities - 1,300 ha drip irrigated chinchilla white gum, 234 ha RO permeate irrigated forage, 102 ha pivot and drip irrigated forage at Mt Hope Station (landholder property, Roma) All cultural heritage clearances obtained Production of line-pipe commenced, >100km already manufactured Clearing of 144 hectare LNG plant site on Curtis Island complete, maintaining the mangroves, construction commenced Bulk earthworks >25% complete Mainland logistics sites well advanced anced 6

8 Upstream Fairview CS-3 Arcadia Valley Wallumbilla Fairview CS-3 7

9 Santos CSG Involvement Fairview Compressor Station 2 Santos recently celebrated 50 years of gas production in the Roma area Santos commenced commercial production of CSG in Queensland in 1995 CSG already accounts for ~90% of Queensland s gas production Santos leveraging strong community presence and good engagement with landholders Santos funds local infrastructure 8

10 Upstream Overview Fairview, Roma, Arcadia, Scotia GLNG project areas ~520 landowner agreements with 200 landowners in place 34,000 hectares of land owned - Used for key development activities and environmental offsets 383 wells drilled to date 207 wells commissioned with capacity ~240 TJ/d - Producing to domestic nomination - Injecting into storage Roma underground storage - Ramp gas management tool - Injection commenced and ramping-up Fairview Area Roma Area Arcadia Area Scotia Area 9

11 Fairview Wells Capacity ~200 TJ/d Gas capacity fo or Individua al Wells (TJ J/d) Gas capacity for individual wells Current average gas capacity is 13TJ/dper 1.3 well, up from 1.0 TJ/d in Jan 2010 Water capacity for individual wells Current average water capacity is 521 bbl/d per well, down from 619 bbl/d in Jan Water Capacity for Individu ual Wells (b bbl/d) Fairview Wells-Well Stock 15 October 2011 (154 Wells) 10

12 Upstream Status We have the rigs we need - 6 drilling rigs and 6 completion rigs in operation - Wet weather in first quarter of 2011 impacted the drilling program - Expect to drill ~135 wells in 2011 and ~170 wells in 2012 Pad drilling - Updating rig fleet - Reduced footprint, lower total cost - Higher productivity Fluor to deliver field development - Mobilisation to field commenced - All long lead items ordered EIS approval for 2,650 wells 11 - Sufficient for current field development plans Multi-Pad Well Heads

13 Nodal Compressor Unit Being Tested 12

14 Temporary Camp Construction 13

15 Reserves and Resources GLNG has 9 tcf of dedicated reserves and resources NSAI estimates GLNG ultimate 2P CSG reserves maturation of 9,848 PJ from existing acreage 1 10,000 8,000 6,000 In addition to CSG reserves, Santos to 4,000 supply 750 PJ GLNG dedicated 2P+2C (PJ) 2 As at 31 December % 2,000 excl 378% GLNG 1 Excludes 750 PJ of Santos portfolio supply sale 247% 277% 2 1,000 PJ = 0.94 tcf P CSG 2P STO 2C CSG NSAI: Netherland, Sewell & Associates, Inc. Based on their analysis, NSAI believe that continued development and appraisal drilling in the GLNG dedicated areas has a reasonable likelihood of extending the 2P reserves area into most of the regions now categorised as possible reserves or 2C contingent resources. 14

16 Water Management Santos water infrastructure well advanced - 2 x Reverse Osmosis (RO) Plants Roma and Fairview - 2 x Associated Water Amendment Facilities (AWAF) Roma and Fairview - Regional bore inventory of around 400 bores - Ongoing monitoring i of around 100 bores Plans going forward - 3 x RO Plants (Fairview, Roma and Arcadia Valley) - 2 x AWAF (Fairview) - 3 x Mobile RO Plants (Roma and Fairview) 15

17 No Impact on Viability of GAB Impervious formation 16

18 Extensive Water Monitoring Santos has an extensive groundwater management plan Supported by one of Australia s largest and best proactive groundwater monitoring programs Will be actively monitoring over 100 locations across our fields to confirm our modelling and early warning of any impacts Launched on-line water portal, which will make public and transparent results of monitoring 17

19 CSG: Producing Usable Water Treated CSG water is an opportunity for landholders Landholders in Roma region recognising the value Pilot irrigation trial on Santos land in Fairview very successful up to 25 times productivity Launched first irrigation project with private landholder at Mount Hope Station last month. Santos providing up to 700 ML of treated water, pivot irrigation i system covering 72 hectares and 30 hectares of drip, and 130 hectares of forage crops. Further projects to be rolled out Planning Roma aquifer re-charge. Inject 10 ML of treated water per day. Boost Roma town water supply providing around 50 years of extra water supply 18

20 Hydraulic Fracturing Established oil and gas industry practice for more than 60 years Going forward will depend on the geology of the area Purpose, to open coal seams without natural fractures to allow extraction of more gas - Individual wells more productive, limiting drilling and surface footprint Process involves pumping a mixture of sand and water and a very small amount of chemicals (around 1%) - Chemicals are safe in the concentration used; found in household We are transparent about the chemicals we use - On website - Inform regulator and landholder Extensive regulations in place in Queensland - Water management and testing requirements 19

21 Pipeline Line-Pipe, Jindal SAW 20

22 Status Saipem - Office established in Brisbane - GLNG personnel embedded with Saipem in Farno - Expected to start laying pipeline pp 2012, on track - Two full pipe laying seasons to complete Engineering and procurement more than 40% complete Line pipe production commenced - More than 100 km to date at approximately 150 joints (1.8km) per day Marine crossing line pipe complete and in storage in Batam Geotechnical survey has been completed along the main pipeline route 21 Line-Pipe at Jindal SAW Line-Pipe at Jindal SAW

23 Pipeline Route / Scope KP 400 LNG Terminal KP 300 KP 200 KP 100 KP km x 42 #600 Pipeline Free flow capacity sized for two trains 2-layer FBE Coating plus epoxy lining Wall thickness, 14.1mm to 19.7mm 6 MLVs Launcher and receiver traps 1 x 5.5km Marine Crossing Pipeline Operations Centre 22

24 LNG Plant and Port TEG Vessels in Manufacture, China 23 LNG Plant model, Curtis Island

25 Plant and Port Scope Located at Curtis Island, Gladstone Two 3.9 mtpa trains, two LNG storage tanks Fishermans Landing GLNG Plant COP Optimised Cascade MOF Process Lump sum contracting R G Tanna strategy with Bechtel Gladstone Ports Corporation carrying out dredging works All critical path permits for mainland and Curtis Island delivered Site position means GLNG less dependent on dredging than other LNG proponents Port Central 24

26 Plant Status Commenced construction on Curtis Island and the mainland facilities Earthworks >25% of required 4 million m 3 completed Completed first Factory Acceptance Test for refrigeration gas turbine NewberthsatFishermansLanding, R G Tanna Raw Materials Facility and Curtis Island pioneer ramp operational All key equipment purchase orders for Train 1 and Train 2 issued Engineering and procurement >33% complete Culvert Installation, Curtis Island Kitchen / Dining building Plant Site, Curtis Island Accommodation Units MacMahon Site offices 25

27 Port Status Western basin main works dredging contract awarded to Van Oord / Dredging International joint venture (VODI) Dredging by Coastal Dredging & Construction at materials offloading facility >60% complete and on track Bund wall construction for the western basin complete Berth pocket dredging complete Dredging, Gladstone Harbour Western Basin, Bund Wall 26

28 Curtis Island, Clearing Completed Camp Accommodation MOF 3 October

29 Plant Material Offloading Facility Pioneer Ramp A D A J Holland s Office and laydown B RO plant area C - Batch Plant D - Haul Road Barge Berth C B Ferry Terminal Aggregate Berth Lo-Lo and Ro-Ro Berth face 3 October

30 Port Central Ferry Terminal and RoRo 5 October

31 RG Tanna LoLo and RoRo Facility 5 October

32 Fisherman s Landing Barge Landing 5 October

33 External Environment Co-existence Respectful relationships Beneficial use of water Economic opportunities 32

34 Overview Bipartisan support for CSG industry in Queensland. Recognised importance in underpinning future economic growth Strong positive track record in the Roma region - Over 50 years of gas production - Fifteen years of CSG Santos operates on grazing land, not cropping land Continued positive traction with Government with most major primary and secondary approvals completed Investment in water infrastructure over the past two years - Industry leading position on water and brine management 33

35 Boosting Local Economies, Communities Substantial economic benefits for Queensland regions Santos employs almost 200 people p in Surat Basin. Will grow to a construction workforce of 1,000 people in the fields Provided opportunities for local businesses a long term industry revitalising the regions Santos has contributed to local social infrastructure (Roma) - a new airport terminal - industry medical helicopter - new allied health facility at the hospital - social and affordable housing = more than $16 million in the Maranoa region plus more than $11 million in Gladstone Project Road-use Management Plan being finalised including LNG industry cumulative impact study with Queensland Government 34

36 Our Actions Speak for Us ~520 land access agreements signed with ~200 landholders Standard rates of compensation reviewed regularly No Land Court action Strong community ties and respectful interaction with landholders We can co-exist with agriculture and boost the productivity of grazing operations through better utilisation of CSG water We can do this in a way that is safe and sustainable, and with no impact on the viability of the Great Artesian Basin We will deliver a once in a generation economic opportunity for Queensland s regions 35

37 Conclusion Key messages First LNG expected in 2015 on schedule World class contractors executing with experienced owner s team Co-existence with agriculture and communities Transparent water management with beneficial use for regional communities 36

38 37 Questions

39 Contact Information Head office Adelaide Ground Floor, Santos Centre 60 Flinders Street Adelaide, South Australia 5000 Andrew Nairn Group Executive Investor Relations Level 10, Santos Centre Direct: andrew.nairn@santos.com GPO Box 2455 Adelaide, South Australia 5001 Telephone: Facsimile: il Useful contacts Share register enquiries: web.queries@computershare.com.au Nicole Walker Investor Relations Manager Level 10, Santos Centre Direct: nicole.walker@santos.com Website: Investor enquiries: investor.relations@santos.com 38